Part 138: Rick Caruso vs. Santa Barbara – On Accepting Real Estate Developers

Published December 11, 2024.

Dec 12, 2024

Photo of All Saints-By-the-Sea Church in Montecito and its view toward the Santa Ynez Mountains next to the Rosewood Miramar Beach resort (GoPro Hero 11 Black).

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By Zachary Ellison, Independent Journalist

The Santa Barbara County Supervisors rejected a total of 5 appeals against the proposed expansion of the Rosewood Miramar Resort, a new record in Santa Barbara County history, by a vote of 5-0 on Tuesday, December 10, after several hours of hearings, public comment, and presentations. Billionaire Los Angeles real estate developer Rick Caruso took the lead for his eponymous firm in making the closing case, joking that he might use all of his time before yielding to Senior Director, Development, Katie Mangin, his son Justin Caruso, a Manager with the firm, and Senior Vice President for Planning and Development, Chris Robertson. Weeks before on November 1, the former mayoral candidate in Los Angeles had declined to speak in winning approval 4-0 from the Santa Barbara County Planning Commission after Robertson dispatched the Montecito Planning Commission. “Success is built on the well-being of their people,” Caruso said about good leaders before flattering the Supervisors, declaring that Santa Barbara was “best in class.” A challenge in the California Coastal Commission likely awaits the project next.

County Planning Staff had recommended approval for the project while noting 9 areas in which “Issues” had been raised: Construction Impacts, CEQA (California Environmental Quality Act), Traffic and Parking, GHG Emissions (Green House Gasses), Evacuation, Lack of a Fair and Impartial Hearing, Coastal Access, Flood Zone Concerns, and Inconsistent Planning. None really mattered—the allure of tax dollars along with progress toward affordable housing goals in the form of employee-only housing—the deal was done. All Supervisors disclosed in their ex parte conversations having met with Rick Caruso to discuss the project, some more than others, and it was clear that challenges against the project, which is in two parts, were going to fail. For his part, Caruso, who might be the most successful developer in all of Los Angeles County, had recently led the vaunted University of Southern California Real Estate Team to victory over the University of California, Los Angeles. This was not a man who fails, even if sometimes forced to compromise on some of the details.

Now, according to a letter obtained using the California Public Records Act, we know just how hard fought this was according to a letter dated October 5. On behalf of Caruso, Senior Director Katie Mangin had emailed David Villalobos of the County Planning Department: “Please find attached a letter we sent to All Saints Church over the weekend.” Adding that she wished it be shared “with the County Planning Commission, Montecito Planning Commission, and the Board of Supervisors,” with a “Please.” The letter addressed to Reverend Channing Smith of the neighboring All Saints-by-the-Sea Episocolan Church was beyond blunt, alleging that the Church had misled its congregation via email using “false renderings.” The author of the letter, Bryce Ross, Executive Vice President, Development & Acquisitions, charged that after 10 months, the Church under Rev. Smith was failing to “negotiate honestly and in good faith.”

In breaking off talks, Ross further demanded a confession of sorts: “A helpful start would be a public recognition that the information disseminated by All Saints in the campaign-style email sent on October 4 was indeed a fabrication and distortion of the truth.” Caruso was in it to win it, and they weren’t about to let concerns about views of the Santa Ynez Mountains, much less access to the Pacific Ocean, or quality of life concerns get in the way of an approval. Soon Rev. Smith made a public turnaround, including an appearance at both the Planning Commission and County Supervisor’s meeting to bless the proposal after brokering a deal. The development next to the house of worship would replace a parking lot and add a 30% reduced 17,500 square feet of retail with an even more reduced number of market-rate apartments from 15 to 8. On the other side of the property, Caruso would offset the lost parking with an underground garage, including mechanical car stackers, and build dedicated 26 employee housing units on top. Caruso also agreed to eliminate a driveaway and to gift the church columbarium stained glass windows. If nothing else, the Church’s opposition, along with neighbors, forced downsizing.

Santa Barbara-based Noozhawk’s Joshua Molina published the following statement from Rick Caruso on the victory: “We are thrilled that the Board of Supervisors unanimously approved our plan for The Miramar today, upholding last month’s unanimous approval by the county Planning Commission.” Caruso added, “This is a thoughtful plan that will enable us to better serve our community, our guests and our employees for many years to come.” The approval came with no community benefits package, with Supervisor’s noting that the development is expected to generate a substantial amount of new tax revenue. Supervisor Laura Capps told opponents that while she opposed an “exclusive island of wealth and privilege,” that the nominally affordable housing was too hard to say no to in Montecito, which has had few such developments, while neighboring Santa Barbara is obligated by State Law to produce 6,000 new housing units.

Supervisor Joan Hartman, in agreement, added, “We’d love to have an LA developer come and help us.” Chair Steve Lavagnino jokingly added, “I guess I’m the only one excited about the retail.” None of the supervisors would clearly commit to actually shopping there. It wasn’t clear exactly how retailers would be selected, much less employee housing units allocated to resort employee’s, nor what would happen with the scant existing employee housing, which nestled against the planned new retail area. Current retailers at the resort include Loro Piana, which sells designer Italian-style clothing; Bottega Venetta, which sells the same along with shoes; ZEGNA, which sells the same on both counts; Brunello Cucinelli, another clothier; Goop Sundries, the same plus jewelry; Laykin et Cie, a jeweler; The Gatehouse, which sells home accessories, clothing, and toys; and two more stores along the same lineage. Needless to say, the Santa Barbara County Supervisors, much less the Planning Commission, are not going to start showing up to meetings decked out in Italian-style get-ups like something out of a movie.

Even as Supervisor Capps almost whimsically asked about evacuation planning, the elephant in the room was clearly traffic. The property is adjacent to the 101 Freeway, which is currently being widened, and the freeway on-ramps immediately to and from are closed. The current plan calls for shopping to be valet only, which will force the valets to shuttle cars from the retail area along South Jameson Lane past much of the existing public beach parking. The intersection of this roadway with Eucalyptus Lane, where an offramp meets a bridge over the 101 past a two-lane traffic circle, appears likely to become so dangerous that you wonder how long it will take for the collisions to start piling up. The traffic studies on the project seemed almost wrongfully understated, and you had to wonder why Santa Barbara wasn’t more aggressive in securing funding for traffic safety improvements at the location, much less where Eucalypus Lane crosses the railroad tracks to nearby Miramar Beach. For all the meetings public officials took with Rick Caruso and his team, why hadn’t they at least tried to mitigate this risk?

The Montecito community had indeed taken up such consideration, but their Planning Commission was all but steamrolled by Caruso’s Chris Robertson in forcing the recusal of Sandy Stahl with a legal threat over ex parte communications, which ended a necessary quorum for discussion. Just over two years ago, discussions were being had about making this exact location safer, as noted in the Montecito Journal just over two years ago by journalist Kelly Mahan Herrick, writing, “There would be improvements to crosswalks by All Saints-by-the-Sea Church, including a curb bulb-out on the west side of the crosswalk to improve visibility around an existing tree.” The tree their talking about, a Coast Live Oak, is indeed substantial, but given the traffic layout, which I’ve jokingly started calling the “intersection of death," it ignores the almost sociopathic nature of people driving luxury SUV’s. The Miramar Resort hosts numerous events, including weddings.

Two smaller Coast Live Oaks stood sandwiched between the 101 Freeway and Miramar Resort ominously. Caruso’s Chris Robertson again promised to improve beach access signage. One appellant, in describing the tactics of Caruso in securing the approval, described it as one in which “the Democratic process was subverted and ignored in order to speed the process along.” The appellant added, “The voices of over 300 residents of this area were ignored in favor of Mr. Caruso’s team of 15 lawyers and executives sitting in the front row with suits and ties!” The City of Santa Barbara is in fact one of the less safer cities for pedestrians and bicyclists in the country. As reported in the Santa Barbara Independent by journalist Ryan Cruz, a recent study found, “From 2017 to 2021, there were 25 traffic fatalities in the city, and in 2021 specifically, the city reported 85 bicyclists killed or injured—the highest total among 105 cities with similar population size.” Caruso may develop very profitable retail, but will the cost of this new revenue be paid in lives? Residents for years have complained about parking problems.

Supervisor Das Williams, who represents the area and previously served in the State Assembly, recently lost re-election for a third term by a narrow margin of 51% to 49% to Carpenteria City Councilmember Roy Lee last March. Williams will leave office in January. After serving in some fashion in state or local government since 2003, Williams defeat was interpreted as a rebuke over his support for cannabis business development and more affordable housing. Prior to the vote, Williams had met several times for lunch with Rick Caruso and employees at the exclusive Miramar Club on the property. Williams, who doesn’t have a membership, explained in the hearing that he had pressed Caruso to limit the retail development. In response to a request for comment, Williams stated that “it is my duty as Supervisor to meet with project applicants, appellants, property owners, and community members, hear their perspectives and share our local community needs.” Williams also stated that he had discussed the need for worker housing as well as “my hope that their team could come to agreement with their neighbor, All Saints By The Sea Episcopal Church.” Whether Roy Lee would have opposed the project wasn’t known.

Some had pressed to delay the vote on that count, but it likely wouldn’t have made much of a difference. The meeting had begun with a presentation honoring a Montecito firefighter and miles to the south over two county lines Malibu was burning up in the Franklin Fire, right down to Pepperdine, where the law school is named for Rick Caruso’s family following a $50 million dollar donation. Caruso had quickly given up law following his graduation after passing the bar in 1983, later becoming inactive, and no longer paying his fees. The firm though deployed one of the best land-use attorney’s in Los Angeles in defense of the Miramar Resort expansion: Dale Goldsmith, a Managing Partner at Armbruster Goldsmith & Delvac LLP. During his presentation, Goldsmith went after attorney Jordan Sisson, who represented several appellants, stating that “although he was an attorney, he wasn’t a land-use attorney.” Jordan Sisson had acknowledged that while there was no stopping the project, some concessions were necessary. Except Sisson is in fact a land-use and CEQA attorney based in Riverside. Caruso’s turn to such outside counsel must have cost a pretty penny, and Goldsmith counts working on “USC’s five million square-foot master plan for its University Park Campus” among his accomplishments. Dale Goldsmith like Rick Caruso has a long history of political donations in Los Angeles, but no evidence of Caruso carrying out the same agenda in Santa Barbara is evident in a search of Santa Barbara County’s online political donation records database.

Goldsmith also previously represented Omni Group in their failed 1.5 million square foot renovation proposal for the Times Mirror Square building in downtown Los Angeles. It wasn’t immediately clear why Caruso had turned to Goldsmith or whether he was the legal team consulted by Caruso’s Chris Robertson in pushing Sandy Stahl to recuse herself at the Montecito Planning Commission or in-house counsel Ben Howell. Either way, Robertson’s performance on October 18 sealed the deal; no amount of resistance in Montecito, whether from a historic church or neighbors, was going to put the brakes on this project like the LA City Planning Commission had put the kibosh on the Times Mirror Square project. Santa Barbara County Supervisor’s may want to consider what they’re asking for in opening the doors to LA, which’s most famous export to Santa Barbara County might not be Rick Caruso as much as its former Councilmember José Huizar, who won’t be released from Federal prison in Lompoc until October 24, 2035. About the meeting, Noozhawk journalist Joshua Molina wrote, “They say you can’t fight City Hall,” adding that “You can’t fight Rick Caruso either. Nope, no, you can’t!

In a Los Angeles Times article from 2022 available on Caruso’s website, the real estate developer is quoted about the Huizar scandal as saying, “We’ve got a City Hall that is deep with corruption." Strangely, the journalists byline for the Time’s Roger Vincent and Julia Wick is removed. Even Caruso like Goldsmith had put money on Huizar, with journalist Jon Regardie writing about the floodgates in 2014: “I rarely swear when looking at the website of the City Ethics Commission,” waxing, “Still, when I visited the site the other week and saw how much money 14th District City Councilman José Huizar had raised for his re-election bid, the expletive shot from my lips like water bursting out of the pipes beneath UCLA.” So if anyone in Santa Barbara has any free time, head on up to Lompoc and ask for inmate #79518-112. Caruso, who sought to cast himself as a reformer in 2022 by self-funding his campaign, doesn’t need money like that, but apparently the affordable housing just couldn’t be done without the retail component.

Supervisor Das Williams reminded the audience on Tuesday that it’s not the role of government to stop people from making money. Assuredly Rick Caruso will make money on the resort expansion, and even if he hasn’t taken up helping politicians like he did in LA, the opulence of the Miramar Resort is stunning, and in redeveloping the property, he did Montecito a solid. Last September to the present, Rick Caruso found himself an appellant too, objecting to Hackman Capital’s planned renovation of the old CBS Television City in Fairfax’s on the grounds of traffic. The appeal filed under Caruso’s The Grove LLC was set for consideration today, Wednesday, December 11 before the Los Angeles City Council (Council File: 21-1315), but no action was taken due to debate over a living wage ordinance. Hotel workers fasted outside City Hall.

California is the Golden State. Home to nearly 40 million people, but increasingly our ability to live together, much less reach reasonable compromises, is being obstructed by our insincerity. Caruso’s inability to recognize and resolve the concerns of his neighbors might not be so much of a clash between NIMBY and YIMBY as it’s an unequal playing field. The rich and powerful always have the best attorney’s and thus greatest ability to influence public decision-making. While no one disputes that Rick Caruso has engaged in some philanthropy, and as the odds of him making a successful statewide run for Governor or Senator fade away, you have to wonder what he goes to sleep thinking about. Montecito was a small beach town, even a village, but clearly it’s simply becoming closer to becoming just another Los Angeles suburb, "Malibu-North,” if you will. Whether the riches of the Golden State, much less the Miramar, are shared equitably remains to be seen, but many in Montecito will watch and wait with a degree of dissatisfaction, even if Rick Caruso was still smiling.

Ruth Roofless contributed to this report, find her work on Substack!

Link: Santa Barbara County Supervisors deny Miramar project appeals

Link: Rick Caruso coaches USC to victory in Los Angeles real estate challenge

Link: Caruso, Miramar Clear Final Hurdle to Build Housing, Retail Project

Link: Miramar Rosewood Beach Shopping

Link: MPC Recusal: Miramar and the 18 Pages Heard Around the Room

Link: More Paths Planned for Montecito

Link: Santa Barbara Streets Not So Safe for Bicyclists, Pedestrians

Link: Latest Vote Tally Cements Roy Lee’s Victory Over Das Williams in First District Supervisor Race

Link: How Roy Lee beat Das Williams 2-1 in their hometown, and what it could mean for cannabis

Link: Profile of Dale Goldsmith, ADG LLP

Link: Mayoral candidate Rick Caruso’s real estate empire poses possible conflicts of interest. Here’s his plan